Avesoro Resources reiterates production guidance despite second quarter dip

The AIM-traded firm reported consolidated gold production of 34,338 ounces in the quarter, bringing first half gold production to 79,435 ounces;

Of that, gold production at New Liberty totalled 18,822 ounces for the quarter, which was a 27% decrease on the first quarter of the year, while Youga gold production was 15,516 ounces, which was down 19% quarter-on-quarter.

Total material movement was 12.3 million tonnes for the three month period - a 7% decrease on the first quarter - with that consisting of 471,000 tonnes of ore and 11.8 million tonnes of waste material.

On the operational front, Avesoro noted that it completed the operational aspects of the transition to contractor open pit mining at both Youga and New Liberty during the period.

“With the operational aspects of the transition to contractor mining at both Youga and New Liberty now in place, I am confident that the challenges experienced during the second quarter have been overcome and that total material movement and gold production will increase in the second half of the year,” said Avesoro Resources chief executive officer Serhan Umurhan.

“As such, I am pleased to reiterate our revised 2019 production guidance of 180,000 to 200,000 ounces of gold.

“At Youga, the temporary production stoppage caused by the transition to contractor mining in June, and the ongoing lower-than-expected grade from the Gassore pit resulted in mill feed grade deteriorating 23% to 1.5 grams per tonne of gold in the quarter compared with the first quarter, leading to gold production of 15,500 ounces during the quarter.”

Umurhan said that, in order to remedy the grade issue, the firm engaged technical experts CSA Global to undertake an operational review of the mining and grade control practices at Youga.

In response to CSA's recommendations, it had employed additional technical staff to manage mining production and grade control at Youga, with Umurhan saying he was “confident” Avesoro would see a “material improvement” in the situation as a result.

“At New Liberty, second quarter gold production of 18,800 ounces was temporarily adversely impacted by the transition to contractor mining in April.

“I am pleased to report that production performance during May and June returned to our budgeted levels and we are now well prepared for the onset of the wet season during the third quarter of 2019.”